Student loan debt hits Black students hardest. Is help on the way?

James Craig, a 31-year-old Black man from Prichard, in South Alabama, has a complicated history with education.

His father wouldn’t allow him to attend the local Black-majority high school, instead sending him to a school with better resources 10 miles away, where he was one of the few students of color. 

He resented the decision then but now realizes that his father wanted a more prosperous path for him. It was a long play, one that his father hoped would give Craig a better chance of being the first in their family to attend college and help him one day leave one of the nation’s poorest cities. 

But there were other, more important reasons Craig’s father wanted him to succeed. 

By the time Craig reached his mid-20s, after a seven-year gap from attending community college, everyone in his immediate family except for his father had died from sickle cell anemia, a disease that lays bare the racial inequalities of health and poverty in the Black community; it also killed his mother when he was 13. For Craig, who also suffers from the rare blood disease, education wasn’t just about escaping and creating a better life for himself. 

The student loans he took out to go back to college were not just for tuition or so he could have a little extra in his pocket to dine out with friends, they became essential to staying alive and supporting his father, who by then was slowly dying from diabetes-related complications.  

“I saw that student loan as kind of like a way to put a bandage on a gaping wound, because it wasn’t just about the money and paying for my classes, it was about me taking care of my father. It was about me helping myself. It was about me affording my medication,” he told Reckon. “So I thought of it as a lifeline that, honestly, I hate to say it, kept me in school almost more than a degree.

He added: “And to be perfectly clear, my situation isn’t abnormal, it’s very normal and what every Black person who has been through the education system is going through.” 


Craig’s story of navigating life’s challenges while amassing student loan debt — $70,000 worth in his case — is one to which many Americans can relate. This year, the nation’s cumulative debt burden reached $1.6 trillion. 

But for African Americans, experts and data show, loan debt can exacerbate existing inequalities within the Black community, pushing some to call the current student debt crisis a racial injustice issue. Now a movement is under way to implement policies aimed at tackling the wealth gap by wiping out student debt.

Compared to their white counterparts, people of color owe $7,400 more on average in student loan debt when they graduate, according to a report by the Brookings Institute. Four years after graduation, they owe $53,000 on average — twice the amount as whites. And that gap grows 6.7% every year, according to an 2018 article in the journal Sociology of Race and Ethnicity. 

During her presidential campaign earlier this year, Massachusetts U.S. Sen. Elizabeth Warren called student debt a racial injustice issue that must be addressed.

Kristin Blagg, a senior research associate at the Center on Education Data and Policy at the Urban Institute, a Washington, D.C., think tank, agrees. 

“The reason that we see different outcomes in communities of color relative to communities that are more predominantly white, is due to a multitude of factors,” said Blagg. “I think one of the broad things that you can point to is sort of the racial wealth gap, which leads to an individual attending the same college potentially [taking] on more loans, because of the lack of savings wealth, to help fill in the gap between the remainder of the cost of attendance. And then also on the repayment side, that wealth gap perpetuates itself.”

Nationwide, white households headed by people 25 to 40 hold approximately 12 times as much wealth as those headed by Black people, according to a recent study.

And that lack of household wealth has consequences. In the Southeast, for example, 1 in 5 people of color default on their student loans, according to the Urban Institute. That can destroy credit scores, further limiting the ability to buy a home or get other forms of credit, while also starving those communities of local investment. 

But it’s not just big borrowers who are most affected.

“I think a common misperception around student debt … is this idea that having a large student debt makes you more likely to default. It doesn’t, actually,” Blagg said. 

“What we find is that people with relatively small debts — $5,000 to $10,000 — tend to be the ones to default because that’s indicative of the fact that you took out a loan for your education, but you likely didn’t complete that degree. And, of course, at that point, you’ve borrowed for something that you haven’t actually collected the benefit of, (which is) getting an associates or a bachelor’s degree.”


For a time, Craig bounced between jobs, battling his own health problems. Meanwhile, he coped with the loss of his brother, who died from sickle cell anemia at age 19, and his sister, who committed suicide to escape the severe pain she experienced from the same disease; Craig’s father passed away in 2014.

Despite those challenges, Craig has come a long way since having to study inside McDonalds, the only place he could get reliable wifi. In addition to his two degrees, he is a published author and poet, was president of the honor society, collected 10 scholarships and finished college with a 3.82 GPA.

But now Craig faces his latest challenge: Does he enter the workforce, where he will soon have to start paying off his loans or stay in school and delay repayment?

“I needed the student loans to have a fighting chance, but now I’m looking at them dreading when they finally kick in,” said Craig, who hopes that the incoming Biden administration will be able to lift some of his burden. “I actually was working three jobs just last semester, just trying to stay afloat because of the different circumstances in my life. 

“So it’s been a very hard road. And that’s why I’m actually trying to enroll in a doctoral program, knowing that I’ll probably have to take out more loans and get a fellowship or something. But knowing that if I don’t, I won’t be in a position to get a job and pay off what I already have.”

But Craig isn’t alone.

Rita Brent, a 33-year-old comedian and public speaker based in Atlanta, has been paying her student loans for 11 years. After delaying repayment when she first graduated, she has managed to reduce that to about $8,000. But the debt has caused her issues in the past, including needing co-signers for apartment leases.

Brent, who attended Jackson State University, notes that the student loan debt crisis disproportionately affects graduates of historically Black colleges and universities, where the average graduate has 32% more debt than those graduating from public and non-public four years schools, according to 2017 data from the U.S. Department of Education.  

“Most people that I know who are plagued by student loans are Black,” said Brent, adding that she also has struggling white friends too. “There needs to be a conversation about what’s available for Black students to go to college for free or at a discount. We’re not getting that education and it’s costing us more. And if we want to go to HBCUs people need to know the disadvantages are already built in. Resources are limited because of the lack of funding.

She added: “At every level in the system, from borrowing to where we choose to go to college, we get a bad deal.”

For many, HBCUs offer a cheaper, more accessible route to college, but they also attract some students with fewer economic resource, which is underscored when those students graduate. U.S. Department of Education data show that among the 100 schools with the lowest three-year student-loan repayment rates, approximately half are HBCUs, despite those schools only accounting for 5% of all four-year institutions in the country. 


Without a student loan intervention, Black communities disproportionately disadvantaged by the pandemic will again suffer economic consequences. That compounds the generational damage brought about by the Great Recession, according to the National Low Income Housing Association. 

Between 2005 and 2009, the median wealth among Black households fell by more than 50%. And over 10 years later, it has not recovered, according to the Economic Policy Institute.

But because 86% of Black students have taken out federal loans, compared with 60% for white students, eliminating student loan debt, which would require an act of Congress or presidential order, could help close the racial wealth gap and spur investment and growth in communities of color, say politicians and economic experts.  Specifically, if all Black student debt were to be wiped out, the household wealth gap between African Americans and whites would fall from 12 times to five, according to a report by the Roosevelt Institute, an economic think tank in Washington D.C.

On Monday, Minority Senate Leader Chuck Schumer again said that President-elect Joe Biden should cancel the first $50,000 of student debt with an executive order. In a press conference in November, Biden pointed to a House Democrat-supported bill that would cancel the first $10,000 of debt for those earning less than $125,000. 

A Republican proposal, proposed by retiring U.S. Sen. Lamar Alexander of Tennessee, would ensure that unemployed borrowers would not have to make payments until they become employed. Once employed, the borrower would pay 10% of their income after paying for essentials like food and rent. Under both scenarios, student loans would be forgiven after 20 years for undergraduate degrees and 25 years for graduate degrees.

For students with high levels of debt, the future is a little less clear. Jade Morgan, a staff attorney for the Southern Poverty Law Center in Mississippi, has around $300,000 of debt and has accepted she’ll probably have it forever.

“I will die with that debt,” the 42-year-old told Reckon. “Being a Black woman, single mother of five kids, my whole life is radical acceptance. It’s just a given. I don’t like it. It may not even be fair. But it’s my reality.”

Morgan acknowledges that many white people also have high levels of debt but said Black graduates face structural obstacles that make earning a living and building wealth as difficult as if they never went to college. 

“We have to work twice as hard and we still get the bare minimum pay, and then we have to go back into the community and deal with how expensive it is to be poor,” she said.

After graduating from the Mississippi College School of Law in 2018, her $43,000 salary was roughly what she earned as a Verizon financial services representative a decade earlier. “Imagine, after accruing $300,000 worth of debt and then coming out and making less money you would make with a high school diploma. When I got out of law school, my first job I was bringing in $22 an hour.”

Morgan’s circumstances have improved over the last two years. She now earns around $67,000, but with such high debt and the responsibility of supporting a large family, she still struggles.

“I would be privileged to stress about my student loans,” she said. “I have not yet even made it that far to be really concerned about it because I’m concerned about making rent, I’m concerned about making car payments, about both my cars being insured because my daughter drives and as a Black parent I’m concerned about her getting pulled over by police.”

The Reckon Report.
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